European Sugar Refineries Association

Member States Reception25th July 2012

Agenda

Introduction

Issues

Myths

Solutions

2

Sugar Refiners in Europe

Tate & Lyle Sugars

AzucareraTereos

Saint Louis Sucre

SFIR

Finsugar

Agrana Lemarco

SidulDAIRAR

LitexZaharni EADZaharen Kombinat Plovdiv

ESRA was formed in February 2011

With 26 refineries, it comprises the large majority of the refining capacity

Represents about 4500 employees with about 2400 customers

ESRA is the common voice for cane refiners with regulatory authorities in Europe

3

Why Europe Needs Cane Refiners

Europe’s cane refiners…

Bring choice to consumers

Contribute to competition

Aid food security by having a different raw material and processing model

Helps deliver EU Development policy by being a stable and long-term buyer of cane sugar

Provide an important link to the global markets

Local industries provide thousands of high quality manufacturing jobs

Two of the 26 cane sugar refineries in Europe

4

Current situation - Challenges

5

Refiners face major challenges to manage their

business

not because they aren't competitive

but because they don’t have fair access to raw

material at competitive prices

or cost efficient

Fair Access to Raw Material - Our Key Issue

EU Commission forecast preferential imports would double from 2006 levels to 3.5 million tonnes

EU refining capacity has been developed on Commission’s forecasts

Current sugar market based on this balance

There is structural sugar supply deficit in the EU market

This needs to be solved to ensure fair terms of competition

Otherwise it is will lead to the destruction of the majority of cane refineries in the EU

2009/10 2010/11 2011/12 2012/130.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Imports from EPA/EBA

EU 2006 Council Agreement

Actuals / Latest

Mill

ion

to

nn

es

6

Lack of raw material - Consequences

7

Refiners not operating at economically viable levels

1

Impact on suppliers and

customers

4Distorts

competition

5

Over 4,500 jobs threatened

2

3

White sugar prices raised 50% in 18

months (Dec-May)

Unbalanced solutions – Evolution

Despite exceptional measures needed because insufficient raw sugar imports More out-of-quota sugar released than alternative raw cane imports allowed In 2011/12 the situation was even more unbalanced : 684 vs 370 thousand tonnes WSE Imports of whites effectively delocalising EU jobs outside 8

Beet Isoglucose Raw cane imports

White imports0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Exceptional measures - Evolution

2010-11

2011-12

Mill

tio

n T

on

nes

WS

E684

370

Issues Until 2015

European Commission should allow the 3.5 million tonnes of duty free cane sugar they forecast would arrive

If it cannot come from EPA and EBA countries then it should be allowed from other suppliers

The current mix of solutions is unfair Average fee of €53 for beets Auction costing €183 for cane

It will kill cane refineries who face Cost of running at 60% capacity Unfair cost of tax and new supply

9

Beet & isoglucose Raw sugar for refining0

20

40

60

80

100

120

140

160

180

200

Average Cost per tonne 2010/11 & 2011/12

Low Imports – Need for measures

1.8mt of EPA/EBA imports forecast in 11/12 may be too optimistic Only 1.38mt of licenses applications have been made until 13/07/2012 only 3 months left!! “Exceptional” measures needed AGAIN because of the structural shortage of imports

10

Imports Latest EU Forecasts 2006 Forecast0

500

1000

1500

2000

2500

3000

3500

EPA/EBA Imports - 2011/12

Th

ou

san

d T

on

nes

WS

E

◄ 13 July

Myths – 4 million imported in 2010/11

In 2010-11 out of 4 million tonnes of imports, 2 million tonnes came as white, refined sugar or sugar within processed products

Refiners could only use about 2 million tonnes, much less than forecasted11

Total For refiners - total0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Total sugar Imports in 2010/2011

Others

Balkans

Import tender

Exceptional TRQ

Processed Products

CXL

EPA/EBA

Mill

ion

to

nn

es

Myths – Raws alternative markets

ISO data clearly shows that cane sugar exports from EPA/EBA countries to all markets have actually fallen since 2005.

Due to structural reasons EPA/EBA exports to the EU have simply not risen.12

2005 2006 2007 2008 2009 20102,300

2,400

2,500

2,600

2,700

2,800

2,900

0

100

200

300

400

500

600

ACP/LDC exports to ALL countries vs world prices

ACP/LDC worldwide export volumesWorld Sugar Prices

YearExported Tonnes '000

World price sugar $/t

Issues Post 2015

13

Beet sugar Isoglucose Cane refiners

Freedom to buy unlimited raw material at market prices

Freedom to sell unlimited end product

What do Refiners Want?

14

Access to raw materials

Fair terms of competition

Quotas maintained

Market share of 3.5 mt of raw sugar

for refiners

Quotas abolished

Parallel reduction of duties and limits

on raw imports

No favourable treatment

We count on you for…

15

Until 2015 at the Management Committee:

Ensure suffi cient measures are taken early and

in a balanced way

Post 2015 At the Council:

Shape a new CMO that ensures a level playing

field to all sweetener producers in the EU

Thank you for your time and attention!

Member States Reception25th July 2012